Development of an urban development component for the Second Economy Strategy Project: an initiative of the Presidency.

Transcription

1 Development of an urban development component for the Second Economy Strategy Project: an initiative of the Presidency. Strategy Document: September 2008 This report is based on work undertaken towards developing the urban component of a second economy strategy, as part of the Second Economy Project, an initiative of the Presidency. Within this project Urban LandMark (ULM) was appointed by Trade and Industrial Policy Secretariat (TIPS) to investigate the urban development component of a second economy strategy. The invitation was To identify the priority interventions and processes required to build cities that are inclusive and efficient for poor people, as a contribution to the development of a wider strategy for the second economy. The task has focused on public investment in urban infrastructure and on the capacity of such investment to impact positively on the socio economic integration of poor and marginalised urbanites. Dr. Mark Napier of Urban LandMark oversaw this task. The project champion was Blake Moseley Lefatola. The project was managed by Dr. Tanya Zack. Sixteen (16) Specialist consultants were appointed to conduct investigations and to prepare position papers and/or presentations that contributed to the conceptualisation and development of this draft report. The consultants, according to areas of work, are: 1. Conceptual overview: Firoz Khan 2. Economic potential of urban investment: Glen Robbins 3. Small business support: Prof. Lochner Marais 4. Subsidised housing and market distortions: Kecia Rust 5. Informal settlement upgrading: Mark Misselhorn 6. Transportation: Mathetha Mokonyama 7. Urban Services: Dr. Kevin Wall 8. Spatial Planning: Nisa Mammon 9. Land Use Planning: Sarah Charlton 1

2 10. Community participation and intermediation: Khanya (Dr. Ian Golman and Marc Feldman) 11. Governance and governability: Monty Narsoo 12. Land use Regulation: SB Consulting (Michael Kihato) 13. Land pricing: Genesis Consulting 14. Titling and Tenure: Lauren Royston 15. Small towns perspective: Prof. Doreen Atkinson 16. Challenges to incorporating informal economy: Caroline Skinner In addition inputs were received from 1. Cas Coovadia, Banking Council 2. Clive Forster, Forster and Associates 3. Dr. Dan Smit, DMS Consultants 4. Frank Meintjies 5. Graeme Gotz, City of Johannesburg 6. Herman Pienaar, City of Johannesburg 7. Karuna Mohan, Ekurhuleni Metropolitan Municipality 8. Prof. Edgar Pieterse, UCT 9. Prof. Stephen Gelb, Edge Institute 2

3 Reference Group: The research has received input from a reference group including the following people: Ahmedi Vawda, Department of Housing Bernadette Leon, DPLG / National Treasury Graeme Gotz, City of Johannesburg Jacob Molapisi Kamini Pillay, City of Johannesburg Li Pernegger, National Treasury Marissa Moore, National treasury Monty Narsoo Nava Pillay, Metsweding Municipality Seana Nkahle, SACN Xolile George, SALGA Yondela Silimela, City of Johannesburg 3

4 1. Problem Both in research and in practice there have been many ideas and interventions aimed at restructuring cities. In South Africa various programmes have been implemented to combat apartheid city form and address the needs of the urban poor. Amongst these the big projects and flagship programmes have had considerable success. Post Apartheid South Africa has witnessed massive state investment, and the poor have derived some benefits of property ownership and access to basic services from such investment. But integration at the level of land use planning and management in urban areas is not functioning effectively. And the impact of programmes in terms of economic upliftment of the urban poor has been marginal. This is despite direct transfers to the poor through housing and basic services. To a large extent urban areas remain spatially inefficient and exclusionary. Overall city form which is of a sprawling nature and poorly linked to public transport does not enhance the accessibility of the poor to employment or income generating opportunities. The location of housing opportunities at the outskirts of urban areas limits the possibilities of this housing being used as an asset either through sale, subletting or through the incorporation of income earning opportunities on site. In addition the numbers of people living in informal circumstances whether in backyard shacks or in informal settlements or living in accommodation that is inadequate, such as in slummed inner city buildings, remains unacceptably high. The 2007 Community Survey released by Stats SA indicates 14.5% of households of a total number of households of , live in informal circumstances i.e households. At a household size of 3.9 this translates into over 7 million people who are housed informally. This figure excludes other so called formal, but inadequate accommodation types. While state interventions to enhance economic opportunity for the poor have paid attention to local economic development interventions, employment creation and small business interventions, there is an increasing interest in the elevation of physical space and place in economic arguments for improving the circumstances of the poor. There is also heightened awareness of the dangers of not attending to these spatial elements. Where city form is inefficient, it disadvantages all city dwellers, but disadvantages the poor most intensely. Robbins (2008, p4) notes, It is critical to note that literature on economic growth and urbanisation has traditionally tended to focus on narrow productivity gains accruing from denser labour markets and the like. Very little attention was paid to externalities of urbanisation in many urbanisation models In recent times it has been recognised that urbanisation processes bring with them many negative externalities which can feed on each other if not accompanied by effective action from the state and other urban role players. Such externalities would include congestion, pollution, societal conflict and other forms of social distress. Authors writing about the persistence of an urban underclass in many developed country cities make the case that due to the fact that this underclass has to bear the brunt of the of these externalities, with little of the state attention that growth zones or more affluent neighbourhoods secure, they tend often be trapped as an 4

5 underclass. These externalities speak directly to city form and to the need for effective urban services that serve all urbanites and particularly the poor. South African urban forms are apartheid creations and these exclusionary and fragmented spatial patterns persist. Experiences of urban investment, and in particular housing investment, that has been targeted at the poor, have illuminated the danger of exacerbating poverty in our programmes where housing or other infrastructure programmes are not tied to city restructuring. When poor people are provided with housing but not access to employment and therefore to the means to pay for services, maintenance of the housing or other living costs, they are exposed to being asset rich and income poor. Accessibility to employment is linked to spatial city form, which is in turn linked to transportation. Poor urban form fundamentally undermines the very purpose for the existence of cities centres of production, consumption, information processing and government expenditure. The need for strategically focused intervention Two constraints overlay ambitions that seek to address the exclusion of the poor in urban areas. The first is limitations on state capacity both in terms of human resources and in terms of financial resources. The second reality is the world energy crisis. These problems suggest that it is critical that the economic inclusion of the poor in urban be addressed, and that state capacity be enhanced to do this, but that we are faced with a looming energy crisis which will demand that interventions be sustainable. We do not have the luxury of addressing poverty first and pursuing sustainable development later. While there are notable exceptions and areas of particular strength, much of the state bureaucracy is struggling with problems of capacity, coordination and corruption. Furthermore the scale of the need for delivery of urban infrastructure is large and limited by fiscal constraints. The existing problems of poor city form are likely to be exacerbated by the global energy crisis. Global oil resource constraints mean that the economic disadvantages of vast travel distances will worsen for all. Put another way, given the severe challenge of economically including the poor in urban areas and low state capacity to do so, interventions must be strategic. Public investment must be focused where the benefits of inclusion are maximized. An additional key driver in such strategic direction should be the energy challenge that faces urban areas. Cities will have to change in the face of this crisis, and such change will have to focus on increasing the efficiency of movement and the possibility of income generation in urban areas. The focus on overall city form how space in urban areas is allocated and how it is connected by transportation is crucial. This is because investment in urban infrastructure is not in itself poverty reducing but contributes toward poverty reduction when well targeted. Although there are obvious benefits to simply having access to services, and such access is critical, the economic benefit of access may be greater or lower depending on its location, its linkages with other urban services and its 5

6 potential to unlock investment in other infrastructure or land uses. Similarly shelter is in itself not poverty reducing but can enhance income generation and promote asset building where it is well located. The optimal poverty reduction benefit of urban investment lies in the nexus between city restructuring, shelter provision and the delivery of public infrastructure. This is the fulcrum of spatial integration. Where housing and services are located matters, and matters fundamentally. In infrastructure investment terms this requires that the focus be on densification and on mass transit as the driver of city restructuring. The delivery of this infrastructure needs to optimise labour intensive practices within social contracts that lever public, private and community resources. 2. A strategic response to inclusion a focus on access to urban infrastructure This strategy focuses on urban investment and on citizens as consumers of infrastructure in cities and towns. The focus is on enhancing the access of the poor to effective services in order to create the conditions for increased participation of the poor in the economy and in public life. There are several reasons why investment in public infrastructure in the interest of poverty alleviation in South Africa is critical: The bulk infrastructure requirements for an efficient and sustainable urban form are not different for the wealthy or poorer sectors of the resident population. Efficient cities work better for everyone and increase the access of people to job opportunities as well as the access and mobility of employment opportunities and sites of production to labour. However the dependence of the poor on such efficiencies and on lower costs of accessing such public services, in order to access income generating opportunities, are greater. Bulk infrastructure in South African cities is reaching capacity in many places and key infrastructure for energy generation is inadequate. Well functioning and economically effective urban space requires that the necessary infrastructure web be in place. Public infrastructure provides the utility foundation to attract private investment in employment generating activities. This is a direct investment in job creation. The combination of extreme backlogs in bulk infrastructure provision and a post apartheid focus on directing investment towards developmental, social and micro infrastructure has meant that the country s ageing infrastructure is highly stressed. Ongoing investment in a capital web and bulk infrastructure and the maintenance thereof provides a basis within which the extension of services to the poor within that framework are relatively easily achieved and are not a dramatic exercise or cost. 6

7 3. Principles of an infrastructure led investment approach An urban infrastructure focus is thus appropriate in the urban component of a second economy strategy. The principles that inform the recommendations made within this project are elaborated in Annexure 1. These principles are focused on developing an approach towards urban public infrastructure that is: Focused on implementation, Differentiates between geographic areas and is tailored to specific contexts, Focused on transportation as the key lever of creating efficient urban structure, Focused on reducing poverty and on enhancing livelihood strategies of the poor, Creates opportunities for employment opportunities to locate in close proximity to one anotherto benefit from agglomeration, Enhances state capacity, Provides predictability for urban investors and all users of urban areas, Focuses on investments that increase efficiency and therefore benefit the poor and wealthy sectors of urban areas, Are rolled out with an emphasis on devolution of responsibilities to reach local targets as efficiently as possible, Are implemented through labour based methodologies wherever possible, Are decided and implemented within a framework of community participation, and Maximize opportunities for partnership approaches between the state, private sector and civil society. 4. Core Programmatic Recommendations This strategic view translates into several possible programmes. The key programmatic interventions for using investment in public infrastructure in ways that can enhance the economic inclusion of the poor in urban areas are: 1. Proactive integration of pro poor land use and transportation planning into municipal IDPs ad budgeting 7

8 2. Infrastructure led upgrading of informal settlements 3. Housing and land delivery focused on well located sites and infill development in urban areas 4. Development of transportation corridors and mass transit in metropolitan areas and large towns 5. Establishment of an economic development programme focused round of large scale public sector area based Special Integrated Presidential Projects, with associated ring fenced funding 6. Adjustment of various development instruments to smooth and speed up the passage of land development and the development and implementation of targeted incentives for private sector involvement in achieving inclusive development. 5.1 Municipal planning for pro poor growth management Recommendation: That each municipality develop a growth management strategy with an identifiable and measurable pro poor element. Given the argument that enhancing economic opportunity for the poor through urban investment requires that the correct relationships between city restructuring, housing provision and infrastructure development be created, the role of strategic and spatial planning in particular at municipal level is crucial. National legislation provides for municipalities to undertake strategic planning through Integrated Development Plans. This policy and its implementation, although it can be read to elevate the function of planning to a strategic and integrative role in municipalities, has been preceded nationally by the roll out of subsidised housing. Housing policy and implementation programmes were in place well before integrated planning instruments were developed. Thus housing delivery has largely not been undertaken within a framework of integrated planning. In fact the planning for housing projects has to date been seated within housing departments of provincial and local government. A key strategy to turn this around is to place the function of planning for housing and for infrastructure delivery within the strategic and spatial planning units of municipalities. Moreover, such units must be required to develop proactive plans for the delivery of housing and services to the poor within strategic planning frameworks that address city restructuring and desired growth areas as well as proposed limitations on growth. Such plans need to be focused on transportation and on the links between public transport and land use. They need to address transport corridor development, densification and a range of housing and economic opportunities created with close proximity to mass public transport. The requirement for this strategic planning which may be termed (as it is in the case of the City of Johannesburg) growth management might be an add on requirement or a requirement within the 8

9 current IDPs of municipalities. In the latter case it may constitute a specific chapter in the IDP on sustainable human settlements (understood as wider than housing delivery).either way a strategic plan with measurable targets and delivery dates needs to be developed. This must be linked to municipal budgets for infrastructure development. The requirement is two fold. In the first instance it requires that cities focus on where growth should be directed, given resource constraints and the impending fuel crisis. This will require attention to available resources and a focus on where growth will be incentivized and where it will be disallowed. The implementation of the strategy should be monitored and reported against using spatial and economic measures so that cities can determine the impact of the strategy on an ongoing basis. This requires that the strategy be translated into land use management instruments and applied in the development control and the assessment of applications within urban areas. The second element is a pro poor element. Here cities are required, within growth management strategies to specifically indicate the spatial opportunities that will be created and enhanced for absorption of the poor. This requires that cities develop a logical and implementable strategy for how livelihoods of the poor will be supported spatially. This includes indicating where affordable housing, employment opportunities and economic opportunities will be located with respect to services and existing employment opportunities. The requirement is not housing specific but requires that plans pay attention also to the location and agglomeration of economic uses with a specific focus on how these will benefit the poor. This focus is not to the exclusion of the needs of the formal economy (for economic growth, for promotion of formal sector employment and economic development) but allied to it. 5.2 Infrastructure led upgrading of informal settlements Recommendation: That all spheres of government develop a coordinated strategy, implemented at local level for the progressive upgrading of informal settlements through an infrastructure led process. A second economy strategy must focus mainly on the poor. In this respect informal settlements constitute the largest component of possible urban intervention areas that will directly affect the livelihoods of the poorest and most vulnerable urbanites. In the interim, informal settlements are the primary reception points for the very poor into urban areas. Informal settlements provide low barriers to entry, low cost and high levels of mobility for the poor. These are important ingredients in supporting livelihoods in a context of low employment levels. Formal housing provision cannot keep up with the pace and scale of delivery required to meet growing accommodation needs. Given financial, capacity, land scarcity and other constraints the Millenium Development Goal targets of slum eradication by 2014 are not achievable via conventional upgrading and housing delivery programmes. There is a need for a new paradigm. The success of promoting access to employment opportunities, income generation and asset building relies on creating effective access for the poor to participate in urban living and to carve in the first instance livelihood strategies that are sustainable in urban settings. Informal settlements provide an effective platform in this regard, where they are often well located and should receive the benefits of recognition and servicing. 9

10 Informality is not a desirable state for human settlements, and formalization and inclusion must be the goals of state policy. But this does not equate with the criminalising of informal settlements, nor with wholesale removal or replacement. A paradigm shift away from regarding informal settlements as illegal, dysfunctional and in need of eradication is required. A clear message is required. This message should focus on the importance of these settlements as reception areas and of well located informal settlements as viable settlements that need to be provided with the correct support and services in order to transform them into sustainable human settlements. The active upgrading of informal settlements on an incremental basis offers a housing programme that can address accommodation needs at scale and reach the bulk of the poorest urbanites in a progressive, fast tracked manner. Much of the policy space to allow for this position to be implemented is already in place via the state s Breaking New Ground (BNG) housing policy. However, this space needs to be appropriated in practice. A key principle of a new approach is that informal settlements should be upgraded wherever possible and short term interim relief measures provided. The preferred approach is to avoid relocations, which are highly disruptive of social relationships and of livelihood strategies. The avoidance of relocation is also about maintaining high settlement densities where possible. This is important for creating efficiencies and sufficient scale for ensuring the viability of public transport and other services. The foregrounding of informal settlements upgrading as a housing solution is premised on the conceptualisation of housing as being more than a top structure (shelter). While these are not unimportant elements, they are part of housing delivery rather than the lead. Infrastructure is argued to be the lead in to upgrading. The upgrading of informal settlements requires a sophisticated approach which encompasses partnerships with the poor and with intermediaries. Skills development is crucial to the informal settlement upgrading programme: If government has any intention to roll out its new Informal Settlement Upgrading Programme, officials have to be sensitised to the obligations placed upon them by the Constitution, and understand the demands of global competitiveness as subordinate to these obligations. This sensitization has to be informed by a deeper understanding of the spatial legacy of the apartheid city, of orderly development and of the market. It also calls for a deeper reform of urban planning beyond orderly development, so as to provide the tools to give South African cities a human face that is not contorted by repression and exclusion Huchzermeyer, 2006, p10). The direct actions required to give force to this position are: 1. Scanning and grading existing settlements: Those municipalities are given a directive to scan and grade informal settlements within their municipal boundaries as an immediate measure. Such top level scanning should indicate what category existing settlements fall into in terms of being (a) well located and fully upgradeable (i.e. with full services and housing delivery) in the short term, (b) upgradeable, but only over a longer period and requiring interim relief measures and incremental interventions focusing mainly on initial infrastructure (which may or may not establish preconditions for full upgrading later), or (c) settlement relocation rapidly required due 10

11 to immediate risks posed by such factors as flooding, hazardous waste, unstable slope or other reasons. This categorization should be fed into a system for prioritising the upgrading of existing settlements. Where safety issues have been highlighted (that are so hazardous as to prohibit upgrading at any future point) and require resettlement of the residents, an emergency plan for such resettlement should be developed. 2. A plan for the progressive upgrading of all settlements in categories (a) and (b) must be developed. The plan must be incorporated into municipal Housing Sector Plans (IDPs) and budget lines (MTEFs). Performance against this plan needs to be monitored. 3. Dedicated funding for the upgrading programme, which is to be an infrastructure led programme should be sourced as a conditional grant to municipalities from National Treasury. 4. Blanket recognition of settlements within categories (a) and (b) to provide a measure of security to residents. This requires developing appropriate special zones for legally recognising informal settlements. It means mainstreaming these settlements onto the municipal cadastre and thereby providing settlements with the rights to access municipal services and municipalities the right to monitor and plan effectively within these settlements. 5. Fast tracking incremental upgrading/development relief: This focuses on those settlements in categories (a) and (b) and which are in need of servicing. These will be upgraded over time. Incremental development and interim relief measures should be provided in the form of interventions for fire protection, sanitation, potable water, access ways, solid waste collection, primary health care, storm water / erosion controls, building materials replacement, education, and LED interventions It is emphasized that the provision of these measures should not be conditional on either land acquisition nor tenure upgrading. 6. These interventions need to be provided within a partnership framework with community organisations and NGOs to enable the municipality to focus on its core competency of service delivery and maintenance. This approach is both essential for widening participatory development and the benefits thereof and for augmenting the state s capacity in what is a highly complex exercise. 7. Progressively settlements should be upgraded to allow for high density, medium rise development attached to transportation corridors. This requires that the proactive securing of land for public transportation axes be prioritized. 8. Getting ahead of informal settlements creation and of slum conditions: Proactive land identification and acquisition: On a prioritized basis local authorities need to identify and earmark and (at the appropriate time) service strategically located land for the future development of well structured informal settlements (e.g. near to future / emerging nodes). Limit densification of existing settlements through negotiation with communities around service provision. 11

12 9. Create a one pot funding stream at national level that is directed to municipalities for the roll out of infrastructure to prioritized settlements. 10. Implement alternative and incremental tenure forms. Progression to full tenure can occur on an incremental basis but need not be prerequisite for development or upgrading. Alternative forms including occupancy certificates supported by effective land use zoning to protect the rights of communities to occupy the land must be permitted. 11. Monitor and evaluate the programme: Performance and non performance on delivery as well a funding flows need to be monitored and an effective system put in place to achieve this and to respond to non performance. 5.3 Housing and land delivery Recommendation: That the economic and social opportunities of housing be optimized and that the delivery of housing for the poor be focused on increased choice and linked to city restructuring in a holistic conceptualisation of housing, beyond the provision of shelter. The 2007 Community Survey released by Stats SA indicates that between 1996 and 2007 the percentage of households living in informal dwellings decreased from 16.0% to 14,5%, while the percentage of households living in formal dwellings increased from 64,4% to 70,5% in the same period. This indicates an improvement in the housing conditions of a substantial number of poor and marginalised households. However a shift from an informal to a formal housing unit, as facilitated by the national housing subsidy or through the market, does not necessarily translate into a move between a second economy status in which people may be trapped in conditions of social exclusion and economic poverty to a first economy status of social inclusion and economic prosperity. The degree of economic and social mobility that households might derive from their housing is dependent upon many factors of which the actual dwelling is only one. Housing stability influences employment and a study has shown that unemployment amongst recent migrants to urban areas is higher than that amongst persons who have resided in urban areas for a longer time. An inverse correlation between length of time in the city and the likelihood of being in informal employment has been found. This correlation translates loosely into a correlation between housing circumstances and economic opportunity the likelihood of a combination of economic, social mobility and housing factors contributing to trapping people into second economy conditions characterised by low wage, uncertain incomes and uncertainty of residential tenure. Coupled with poor access to education opportunity these conditions lay the ground for intergenerational poverty 12

13 While housing in South Africa has not been defined in terms of two economies, it as been seen in terms of different income bands, as illustrated below. Traditionally the state and private sector have dominated different income segments of the housing market, as shown in the table below. Where these sectors have not delivered, shelter needs have been addressed by the survivalist strategies of communities in unserviced informal settlements. Incom e House cost % pop (LFS 2004) E stim ated backlog Ownership Rental >R7500 R7500 (+C P IX ) R3500 R2500 R1500 R0 Norm al Suburban G Affordable Market A State P S ub sidised Housing Programme <R R R % 11% 6% 10% 63% None specified ± units <R and growing A bo ut 2 m illio n rem ainin g: ± 2,3m su b s id is e d units to date Focus of delivery, rapid price escalation Average units delivered annually No new housing delivered is affordable here Only subsidised housing sub sidise d houses delivered in 2006/07 year Limited delivery now growing Social housing stock: < units total nationally Some private sector rental: in ne r city & backyard Backyard rental; inf settl; overcrowding BY rental; in fo rm a l settlem ent; overcrowding This strategy document paper understands second economy in housing terms to relate to conditions of insecure tenure, of inadequate servicing, of poor shelter conditions, of housing that is not readily tradable, of poor location relative to social, economic and engineering infrastructure, and of poor and inhibiting land use management. Ultimately a polarity between approaches that seek to address such marginalised housing conditions and middle or upper income housing in policy or practice may undermine the operation of the housing market and the possibilities for the poor and marginalised to access improved and economically prosperous housing trajectories The housing ideal, on the other hand, is characterised by a single economy in housing and by housing that is located where households want to be and that offers households the ability to prosper, and to progressively improve their housing conditions. In other words the goal is for housing that facilitates job creation, access to economic opportunity and to social development for the poor, within in a single housing market. This aligns with the vision of recent housing policy which indicates that the Housing Ministry is the Ministry of all housing in South Africa, rather than of low income housing. This conceptual shift is critical to breaking barriers between segments of the housing sector. Housing constitutes an asset to individuals as well as to the public at large. At an individual level the asset value of housing lies in its value as a social asset enhancing identity, security and offering shelter which can be inherited. The social networks within neighbourhoods as well as access to social facilities and services, enhances the building of community. Housing also offers the potential of income generation through home based enterprise, rental and other income earning possibilities. Finally 13

14 housing plays a role in individual financial growth as it is a tradable asset and a foothold into the property market for households. At the broader neighbourhood, municipal and society level housing plays a role in job creation through the construction industry. It also contributes to the sustainability of the human settlement, where housing is well integrated with the services and functioning of municipalities and the housing serves both to integrate individuals into community and as a point of engagement with governance structures for service delivery. Housing construction contributes to overall economic growth as it stimulates the demand for other goods. It also contributes to the municipal rates base. Put another way, the asset value of housing is related to: The housing delivery system (job creation, empowerment, partnerships, community involvement etc.) The product (potential for sale, potential for upgrading, density, environmental sustainability etc) The location (access to economic and social opportunities, integrated development) The financing (subsidy mechanisms, other financing, small loans, cost of land, cost of house, cost of finance, and factors that impact on land pricing, including land use management, municipal regulation, etc) The settlement management (municipal administration, local area planning, governance and management) These relationships are illustrated below. 14

15 INDIVIDUAL ASSET Financial The value of the financial asset is dependent on the functioning of the property market. Housing construction contributes dramatically to economic growth due to the forward (furniture, home improvements, etc.) and backward (building materials, infrastructure, etc.) linkages involved. In addition, formal residential properties are a fundamental component of a municipality s rates base. Economic growth Job creation Housing construction is a labourintensive exercise. An increase in delivery can lead to substantial job creation. The potential for SMME development in the home improvements industry is also significant, especially given the nature of RDP stock in South Afirca. PUBLIC ASSET Social The house as a social asset something which provides an address, which can be transferred as inheritance, which gives shelter, was a fundamental underpinning of Sustainable human settlements Economic The house can function as an economic asset by supporting home based enterprises and other income earning activities. Housing (and sustainable human settlements) become especially important as a mechanism for social inclusion and local level satisfaction, as well as overall city performance (financially, environmentally, etc.). This contributes importantly to social and political stability Source: Rust, 2007 But housing delivery statistics alone do not measure the quality of all of these dimensions of housing. Nor do they measure the performance of housing in terms of poverty alleviation (Charlton and Kihato, 2006). As long as housing delivery remains quantitatively biased it cannot reach the goals of enhancing economic opportunity for the poor. Importantly, housing does not equate with poverty alleviation. There are undoubtedly economic benefits to having shelter, but the link between shelter alone and economic advance should not be overstated. The aim of housing programme in enhancing economic access for poor persons must be to strive for well located housing that provides choice in housing typology, tenure and delivery form. The programme should also optimise the possibility of mobility through a housing market. This means a focus away from standardized products for all. Moreover, different conditions and needs prevail in different parts of urban areas. Geographically tailored responses are needed and housing delivery needs to be part of the greater planning process and the planning for a range of services and facilities required in different parts of cities and towns. 15

16 The key geographic areas are: historic townships (including backyard shacks), inner city, informal settlements, Greenfields development, suburbs (densification, inclusionary housing) Government efforts to distribute land and to house poor people need to keep their momentum, but more attention needs to be given to how through these efforts the poor are integrated into urban areas, and integrated into markets (housing markets, land markets, and urban economies generally). Land and housing remain a major asset redistribution tool for the state, but if people who receive such from the state are to benefit as intended, then maintaining the value of those assets for the people and for municipalities is essential. Otherwise we face the situation where households become asset rich, but remain income poor, and as a result often lose their grip on the property asset. Maximising the ability to generate income via the land/ housing asset is an essential focus which needs to be embraced by the state (e.g. through encouraging the small scale production of rental stock by households and by enhancing home businesses). The other major factor is for government to take on the challenge of improving location and class integration, so that benefitting households are able to maximise their access to urban amenities and markets, which will in turn enhance their ability to earn incomes and become less poor. Attention to these issues will also create a more productive urban citizenry able to contribute towards the sustainability of municipalities and the economy more generally. South African housing programmes since 1994 have been ambitious. They have achieved a great deal in terms of quantity. In the process quality has been compromised. In addition the emerging concern hat housing should play a role in poverty alleviation and that the housing market needs to operate as a unified system have not been adequately addressed by policy or practice. While the economic benefits of housing are recognised, they are neither automatic nor inherent to the provision of shelter. They are only achievable where housing is conceptualised and delivered not as shelter but as the creation of integrated, sustainable human settlement. This recognition is also recognition of the limits of a housing programme, isolated from other state programmes, to create conditions conducive to poverty alleviation. Importantly, it points to the high risk of an isolated shelter provision programme to further entrench conditions of poverty and to further entrap beneficiaries within a second economy. The new housing policy confronts these challenges. In order to ensure that the implementation of this policy does not revert to a concern with quantitative delivery, but achieves the desired aim of integrated human settlements, several aspects of the policy and of allied programmes need to be fast tracked. Broadly if housing delivery is going to work in a way that allows poor people to have access to affordable housing in locations where they want to live, this requires that the value of housing as an asset be stimulated. This value is dependent not only on the housing unit but on all suspects of housing development and on the creation of integrated, sustainable settlements. It also requires the facilitation of the financial market at the lowest end of the property market and smooth flows of financial instruments and of housing options for different income segments. Addressing poverty alleviation and providing a launching point for economic development in housing requires that informal settlement upgrading be stepped up, that land acquisition for the development of well located low income housing 16

17 be strongly established at local government level and that land use planning and management in the interests of enabling equity is implemented. The interventions that should receive focused attention, in addition to the recommendations made around the prioritization of informal housings, are concerned with actions that will address the whole housing environment, and those which should be tailored to specific geographic areas, as indicated below: Generalised interventions in formal housing environments Capacitation: The implementation of housing and land innovations at scale requires the capacitating of local government planning and housing units. The JIPSA initiatives to improve the numbers and skill levels of professionals in planning and design need to be fast tracked as part of such capacity building programmes. Capacitation requires a combination of training interventions and systems interventions. In terms of systems it requires the re engineering of municipal systems to simplify and shorten processes. In addition skills within municipalities should be augmented by skills within the private and NGO sectors, particularly with regard to the sophisticated and complex processes of informal settlement upgrade. A study into the professional skills development required for enhancing the access of the poor to the urban land market has found that there is a significant skills gap amongst planners and both the private and public sector in the areas of property economics and land finance. Furthermore, there is a need to enhance skills of municipal officials and councillors around the property market implications of planning regulations. NGO workers and municipal officials would benefit from internships and mentorships. There is also need to raise awareness and debate at a broad level about how to make land markets work better for the poor. Municipal accreditation: Little progress has been made on the accreditation of municipalities this needs to be fast tracked as a matter of urgency both to scale up housing delivery and to speed up spatial restructuring of urban landscapes. Large municipalities meanwhile are attempting to align with BNG. Already, the cities of Johannesburg, Ekurhuleni, ethekweni and Tshwane have sought to redraft their housing strategies in line with BNG Land use management: Allied to municipal accreditation for housing development is the devolution of powers for land use management to local level. The current systems which involve both provincial and local government in much land use planning and management are inefficient and cumbersome. Metros particularly need to be empowered to undertake land use management. These systems need to be streamlined in order to speed up development. Housing Development Agency: The NDOH s policy on accessing affordable land for housing envisages the creation of a government funded Housing Development Agency (HDA) that would proactively acquire land for housing. 17

18 While the acquisition of land for housing is crucial to accessing well located land particularly for the urban poor, and the initiative to upscale the acquisition of land through state mechanisms is important, there are several risks that need to be mitigated in order to ensure that land acquisition initiative is not counterproductive. These include: The NDOH, or any state an agency involved in land acquisition, requires access to precise information on land cost figures A land acquisition agency needs to be well capacitated with sophisticated skills in identifying land and negotiating for land purchase The activities of other national departments involved in land acquisition need to be coordinated A national level HAD must not undermine the existing role of strong municipalities in the acquisition of land for affordable housing The anticipated benefits of access to services, and employment and of reduced transport costs must be realized in the land purchase Benefits of land subsidisation must accrue to housing consumers State level land acquisition must not be seen to compete with the private sector s top structure development function. Mechanisms for scaling up the acquisition of land need to be focused, to coordinate the activities of state actors and to facilitate rather than undermine land acquisition at a local government level, where, it is argued responsibility for housing delivery be coordinated with the planning for integrated settlements, through municipal integrated development plans. Land development is also complicated by the opaque lines of responsibility for land. Currently various aspects of the responsibility for the acquisition and development of land for housing purposes falls within Department of Housing, the Department of Land Affairs and the Department of Environmental Affairs and Tourism. Roles need to be clarified as a matter of urgency in order to expedite development. Greenfields development: The reduction in the prohibition period on selling RDP homes is important. However it is not sufficient as a mechanism for avoiding beneficiaries being locked into certain locations. The long waiting lists for housing, the limited choice of location and the dormitory nature of many state subsidised housing environments create conditions that trap people in certain locations and in the lowest end of the housing market. While any form of corruption in the sale of housing must be dealt with, the attempts of poor people to realise the asset value of their housing should not be criminalised. Enhancing access to title: Delays in deed registration slow development processes considerably. These systems need to be streamlined. Existing neighbourhoods Rental and backyard rental: There is not sufficient rental stock available and this sector needs to be enabled to promote choice of tenure in the housing market. The enabling of backyard rental is critical for both the speedy provision of housing solutions for that requiring rental accommodation and for 18

19 enabling the asset value of housing as primary owners are able to derive income form rental. The added social value of close networks for newcomers to urban areas (as described above) is critical to community building and to providing poor household with a foothold into urban systems. Home based enterprise: A large number of small entrepreneurs in townships and inner cities use their homes for business purposes. The enabling of the use of housing in this way, which stimulates its asset value is important in breaking economic barriers. Inclusionary Housing Policy: A key innovation in promoting integrated settlements is the proposed Inclusionary Housing Policy. The (IHP) proposal envisages the imposition of a requirement on privatesector housing developers to set aside a stipulated percentage of new housing stock for affordable housing. The importance of developing integrated housing environments both to counter the apartheid city form and to provide linkage across different income groups cannot be underestimated in the development of successful national housing strategy. Its implementation requires sophisticated skills and the appropriate incentivising of private sector developers. Inner Cities Inner City Housing: Housing initiatives that promote inner city housing development and improvement are key to the upgrading of degraded inner city areas while simultaneously impacting on the restructuring of apartheid city form. These initiatives are to be encouraged through urban renewal programmes, the creation of Urban Development Zones and tax incentives for the development of low income housing in central locations. Social housing plays an important role in these environments and has been successfully developed in several cities. The challenge of dealing with overcrowded high density buildings that suffer slumlording in the context of poor land use management needs to be tackled aggressively to ensure that poor entrants to the city have access to affordable, decent housing units in inner city locations. This requires the consideration of public involvement in the development of social housing, of strategies that do not dispose of public residential assets in these environments and of proactive acquisition of buildings for redevelopment for low income residents in inner cities. 5.4 Transportation Recommendation: To lower costs of transportation by improved planning, focused on transport led corridor intensification. Given the twin concerns at the introduction to this paper: the fuel crisis and the primary issue of urban poverty being a poverty of access, transportation is at the apex of spatial development strategies. Mass public transport must be proactively planned and implemented as the basis of capital web of infrastructure and facilities around which dense development fits. 19

20 The trends of increasing urban populations and declining household size, within urban spatial patterns of sprawl, is placing increasingly excessive demands on the existing transportation capacity. Transport network congestion will increase. The poor suffer more severely as a result of such congestion, being highly dependent on public transportation and choices. Proposals need to reduce the cost of transport, increase the accessibility to income generating opportunities and increase the efficiency of city form in order to promote greater access for the poor. Improved access works both ways, also increasing the access of centre of production to labour and the possibility of employment opportunities moving closer to labour sources. The strategies proposed are in line with Moving SA project it is arguably an opportune time to revisit those proposals in the light if the energy crisis facing SA. In summary they require: Promoting the use of public transport as well as the more intensive development of land in order to support the use of public transport systems Meeting basic transportation needs, and promoting the creation of employment and training opportunities, stimulating economic development by investing in infrastructure and facilities, and involving communities in the implementation of projects Integrating land use and transportation planning so that these elements compliment each other Densification of mixed land uses (especially along transport corridors) in order to shorten work trips and travel times, reduce travel costs, and facilitate the use of non motorised transport. The densification of transport corridors requires that such corridors be clearly defined by planning and transportation authorities to incorporate land use and transport needs. The metropolitan and urban based corridors and potential corridors would be clearly mapped. Associated development rights and trading of development (value capture strategies) must be designed to incentivise appropriate land use mixes and densification along these spines of access and mobility. These corridors are lines of increased access to public transport and increased mobility of public transport (not freeways). The corridors should be the focus of high capacity plans (mass transit plans) and should incorporate minibus taxis within this framework. Land use development must be focused and concentrated within corridors and concomitantly restricted outside of these areas in order to ensure densification. Transit oriented development and design should receive priority in nodal areas and along corridors. This includes sensitivity to high quality pedestrian environments, design for safety and lighting. Street design guidelines (incorporating safety design, street furniture etc) should be developed for SA roads. The implementation of these in priority areas should be undertaken using labour based job creation methods. Non motorised transport, especially for the youth should be encouraged. Bikeways and pedestrian safe pathways should be developed and cycling programmes rolled out through schools. Non motorised transport networks should focus on areas around schools. Proactive planning of cycle paths in cities should be encouraged, particularly in the face of a looming fuel crisis. In addition a focus on the improvement of pedestrian pathways is crucial. A prioritized roll out of upgrading of pathways that carry major pedestrian flows should be undertaken. 20